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GORDON CAPITAL PTY LTD � Ph: +61 3 9607 1371 � www.gordoncapital.com.au
Gordon Capital Pty Ltd, is a Corporate Authorised Representative No. 338899 of InterPrac Financial Planning Pty Ltd (AFSL 246638)
Gordon Capital Pty Ltd Page 1 of 20
CAPRICORN METALS LIMITED (CMM)
KARLAWINDA GOING FOR GOLD GCR Valuation: $103 million/$0.26
DIRECTORS & MANAGEMENT
Guy LeClezio – Chairman, Non-Executive Director
Peter Thompson - Managing Director
Peter Langworthy - Technical Director
Heath Hellewell - Non-Executive Director
Neville Bergin – Project Study Manager
MARKET DATA (as at 11/04/16)
ASX Code: CMM
Current Price $0.14
Market Capitalisation: ~$54.5 million
Gordon Capital valuation $103 million/$0.26
CAPITAL STRUCTURE (as at 23/03/16)
Current Shares on Issue: 217.1 million
Escrowed Shares*: 171.6 million
Listed/Unlisted options 7.5 million *held in escrow until 03/02/17
MAJOR SHAREHOLDERS (as at 29/02/16)
Centrepeak Resources Group 19.09%
Regis Resources Ltd 9.90%
SENIOR ANALYST
Stuart Glazebrook
+61 402 216 835
April 2016
Capricorn Metals Ltd (ASX: CMM) is an ASX-listed
company focused on the exploration, development and
production of gold its assets in Western Australia.
Formerly Malagasy Minerals Ltd, CMM is developing the
Karlawinda Gold Project in Western Australia, having
secured a 100% interest in the project in February 2016.
IGO completed a detailed Scoping Study on Bibra, before
deciding its modelled output did not meet their corporate
development objectives. The ~400km2 tenement package
also contains the advanced Francopan Gold Prospect, and
a number of other prospective exploration targets.
Since re-badging from Malagasy in February 2016,
Capricorn has commenced a 48 hole, 8,000 metre RC
drilling program to extend the known resource at Bibra
with first results confirming higher grade mineralisation at
depth which will underpin a new Scoping Study expected
to be completed by July 2016.
Gordon Capital Pty Ltd Page 2 of 20
+650,000oz of inferred
gold resources already
identified
High grade intersections
outside of current
resource envelope and
suggest possible higher
grade mineralised core
Leadership team have
strong track record of
discovery & development
EXECUTIVE SUMMARY
Located deep within West Australian iron-ore country, the Karlawinda Project was first
pegged by Western Mining Corporation in 2005.
Despite its thesis as a likely new gold province, WMC - who were looking for new nickel-
cobalt resources and in the throes of a BHP-Billiton takeover - passed it along to
Independence Group in 2008 who subsequently discovered the Bibra Gold Deposit in
2009 before going on to define more than 650,000oz of inferred gold resources (JORC
2012 compliant); spending a total of A$12M, including completion of a Scoping Study.
In 2016 Capricorn Metals Ltd (ASX: CMM) purchased the Karlawinda Gold project from
IGO with a final A$1.5m payment outstanding.
Building on the established Inferred resource
at Bibra there is potential to quickly uplift the
existing resource endowment to Measured and
Indicated status through the current and
further drilling programs. Recent drilling
results suggest the presence of a high grade
core to the mineralised system and included
9m @ 5.10 g/t Au from 169m in hole KBRC285
and 9m @ 3.32 g/t Au from 126m in hole
KBRC290 in a hanging wall lode which could
become very significant in additional resource
ounces and reduced stripping ratio (Figure 8).
Sustained positive assay results (anticipated by
the end of April) and a confirmed resource
growth pathway should prompt a re-rating of
the Company as it de-risks Bibra and moves
towards profitable production.
Within the Karlawinda tenements the nearby prospects
at Francopan and K3 have significant potential to add further ounces with previous
exploration work identifying the possibility of a larger, higher-grade mineralised core at
depth that have been interpreted as potentially hosting a +1Moz orebody.
Scoping study work by previous owner IGO modelled the potential for a simple 3-stage
open pit mining operation with a straightforward CIP flowsheet and onsite treatment
plant. Proximity to existing infrastructure ensures modest capital costs while
optimising cash flow for a high tonnage-low grade deposit. Capricorn is likely to follow
the operational blueprint of major shareholder Regis Resources (ASX: RRL) who have
demonstrated success with comparable grade and strip ratios at their Duketon gold
operations near Laverton in Western Australia.
The Board and Management team of Capricorn have a well credentialed track record of
project discovery and development success.
FIGURE 1. PROJECT LOCATION
Source: Capricorn Metals
Gordon Capital Pty Ltd Page 3 of 20
All-in-Sustaining Cost of
A$858/oz
Bibra valuation =
A$103M (NPV20)
FIGURE 2. KARLAWINDA GOLD PROJECT - Location Plan
Source: Capricorn Metals
Valuation
At Bibra Gold Project, Capricorn is looking to process 2.5Mtpa to produce 80-100koz/yr
at an All-in-Sustaining-Cost of A$858/oz for at least 7 years. Our modelling assumes
funding of Bibra with conventional debt and equity and we have budgeted capex of
A$100M (inclusive of feasibility costs and contingencies). We expect the company to
mitigate its funding mix to minimize dilution risk. Additional discoveries and increases
in average resource grade would positively impact project economics.
At its current resources status Gordon Capital has determined a valuation for Capricorn
Metals’ Bibra Gold Project using a 20% discount rate (NPV20) of A$103M.
Gordon Capital Pty Ltd Page 4 of 20
Resource expansion
potential is significant
Strong shareholder
support
BUSINESS OVERVIEW - KEY POINTS
• Capricorn Metals Ltd has purchased the Karlawinda Gold Project in WA Pilbara
region from Independence Group.
• Karlawinda contains the Bibra Gold Deposit which has a previously defined
Inferred JORC Resource of ~650,000oz. Regionally there is considerable resource
expansion potential within the Company’s adjacent tenement areas.
• The Company is currently completing a drilling program to test the open extent of
mineralisation at Bibra toward completion of a Feasibility Study by June-July 2016.
• The Company is confident further resource delineation work will uplift the existing
resource endowment within an accelerated timeframe toward a decision to mine.
• High free-dig/free-mill component to the orebody, proximity to local
infrastructure and likely pit and plant design support a low cost mining operation
with significant cash flow potential at current gold prices.
• The Company has support of two significant shareholders: Centrepeak Resources
Group (19.1%) and Regis Resources (9.9%).
• Capricorn has an experienced Board and management team with extensive
experience in metals and mining. Managing Director Peter Thompson has more
than 25 years experience in exploration, development and management of gold
and base metal mines, including 7 years with WMC and senior roles in ANL, JBM
and SBM.
• Former Doray co-founder Heath Hellewell is on the Board representing major
shareholder Centrepeak Resource Group along with Malagasy Minerals founding
Director, Chairman Guy LeClezio and Technical Director Peter Langworthy.
FIGURE 3. SHARE PRICE CHART
Source: ASX, Company Announcements
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
Apr-15 Jul-15 Oct-15 Jan-16 Apr-16
Shareholders approve name change to Capricorn Metals
Karlawinda acquisition announced
Gordon Capital Pty Ltd Page 5 of 20
Native title still needs
ratification
BHP-Billiton have a
clawback provision
INVESTMENT THESIS & VALUE PROPOSITION
While many resource companies spend years and considerable shareholder funds
running endless drilling campaigns and desktop studies, it is encouraging to see those
with the right skills and experience still willing to take the risk and grow their
Company’s value through building a mine. Karlawinda’s potential to host million ounce
orebodies remains untested, but at least with Capricorn Metals we will find out.
RISKS
FUNDING
The final instalment (A$1.5M) for the purchase of the Karlawinda Project is due in mid-
August 2016. The Company expects it will be able to meet that payment obligation
before the deadline. Going forward, the Company has a number of short and long-
term, dilutive and non-dilutive funding options for consideration as it progresses
through feasibility study toward a decision to mine.
1. Internal Capacity – The Company recently reset its equity issuance capacity with
25% still available. Under current SOI (389M) the Company could place ~97M
shares, which at current prices would raise ~A$10M in additional working capital
2. Equity Issue (Placement/Note) – further placements could be made to new &
existing shareholders, in particular major holders: Regis, CRG and/or Greenmount
3. Debt-funding – with a more holistic approach this option may prove attractive for
the completion of resource development drilling and feasibility study, and the
financing of mining and mill construction
4. Madagascar Asset Sale - the Company has announced that these assets are to be
monetised, including a key piece of real estate in the centre of the capital,
Antananarivo. The Company has valued these assets at around A$4.9M
At December 31 2015, Capricorn Metals had a cash balance of A$650,552 with a further
A$1.5M banked following a placement in February 2016.
Native Title
There is no outstanding heritage or environmental issues over Karlawinda with
Capricorn having already commenced the Mining Lease application process with just
one Native Title claimant.
Clawback
Under the terms of the original sale agreement between WMC (BHP-Billiton) and IGO,
BHP-Billiton retain a 2% Net Smelter Return with a claw-back provision whereby BHPB
can elect to acquire a 70% equity in the project only if JORC compliant resources of
5,000,000 ounces of gold and/or 120,000 tonnes of contained nickel have been
delineated. Any likely acquisition would be priced at 3x cost.
Gordon Capital Pty Ltd Page 6 of 20
SWOT ANALYSIS
STRENGTHS
• Dig-ready project with
defined resources
Previous IGO Scoping Study confirmed gold resource
potential with substantial upside
• Straightforward mining
operation
Geological setting means simple open pit mining with low
strip ratio and simple processing flowsheet
• Location Proximity to infrastructure and skilled workforce
enhance cost efficiencies & cash flow potential
WEAKNESSES
• Current resource Present resource is 100% Inferred only. Timely resource
upgrade in quality & extent is critical. Lower grade –
higher tonnage operation could impact margins at lower
A$ gold prices. More ounces, preferably at higher grade,
will improve economics
• Native Title Native Tile agreement covering the Karlawinda Project is
yet to be signed off
• Process plant Currently no on-site treatment facilities with a suitable
plant required to be sourced or built and financed
OPPORTUNITIES
• Regional exploration Exploration work has identified a number of untested
anomalies beyond Bibra with 1Moz+ potential which
could lead to a new previously unrecognised gold camp
• Madagascan land sale Any sale at current estimated value (A$4.9M) would
alleviate need to source funding externally to complete
Karlawinda acquisition and fund drilling program
• M&A/Corporate activity Gold and gold producers are currently very much the
focus for resource investors
THREATS
• Madagascan land sale Protracted sale process could deny significant source of
future resource development funds and the need to go
back to the market or existing shareholders
• A$ gold price collapse Low grade-high tonnage operation increases
vulnerability to fluctuations in A$ gold price
• Ongoing funding risk As with most in the resources sector access to ongoing
funding is challenging. CMM has to strike right balance for
shareholders between dilution and project realisation
Gordon Capital Pty Ltd Page 7 of 20
New gold province in WA
“Iron Ore Country”
No material work has
been undertaken from
2013 to now
PROJECTS - GOLD
KARLAWINDA GOLD PROJECT (Western Australia; CMM: 100%)
The Karlawinda Gold Project is located in the Pilbara Region of Western Australia,
approximately 65km from the township of Newman, and is surrounded by some of the
world’s largest iron ore mines. The Project area comprises 6 tenements (covering an
area of ~400km².and contains the highly prospective Bibra Gold Deposit and the highly
endowed Francopan Gold Prospect, along with a number of high quality target areas
and excellent regional gold potential.
FIGURE 4. KARLAWINDA PROJECT
Source: Independence Group
Background
Originally discovered by WMC (later acquired by BHP-Billiton in the takeover of WMC)
in 2005, the Project was acquired by Independence Group in 2008 who then embarked
on a comprehensive drilling and exploration program resulting in the discovery of the
Bibra Gold Deposit in 2009.
IGO completed a Feasibility Study in 2012 after delineating Inferred Resources of more
than 650,000oz of gold at Bibra. In 2013, IGO chose to sell its interest in Karlawinda
writing down almost A$17M in acquisition, exploration and study costs after
consideration in the prevailing gold price environment that the project’s then defined
resource “no longer meets internal metrics for development”. No material work has
been undertaken on the project from 2013 to date.
On 26th October 2015, Capricorn Metals (previously as Malagasy Minerals) announced
it had executed a Heads of Agreement (HOA) with Greenmount Resources Pty Ltd, an
entity company specifically established by private resources investment company,
Centrepeak Resources Group (CRG) to acquire the Karlawinda Gold Project from IGO
encompassing the Bibra Gold Deposit and Francopan Gold Prospect.
Gordon Capital Pty Ltd Page 8 of 20
CRG holds 19.1% interest
in CMM
Regis hold 9.9% interest
in CMM
Inferred resource of
~650koz of gold
Current drilling program
has identified strong
continuity of
mineralisation outside
the current known
resource
Updated resource
statement is expected in
June 2016
CRG is managed by a highly experienced team of geoscientists and holds a 19.1% direct
interest in Capricorn Metals Ltd. The deal to acquire 100% of Karlawinda was finalised
in February 2016 with Greenmount paying the first instalment (undisclosed
amount)with a further instalment of A$1.5M due by mid-August 2016.
ASX-listed Australian gold mining company Regis Resources Limited (ASX: RRL) has
subsequently acquired a 9.9% interest in Capricorn Metals as part of a A$1.5M capital
raising to fund further evaluation of the Bibra deposit.
FIGURE 5. KARLAWINDA TIMELINE
2008
IGO purchase
Karlawinda
project from
BHPB
(following
their takeover
of WMC) for
$4M
2009
Bibra
Prospect
discovered by
IGO following
regional
surface
geochemical
program
2009-2012
$12M
invested in
drilling &
mining
studies at
Bibra by IGO,
outlining an
Inferred
Resource of
650,800oz at
Bibra
2015
Greenmount
(with CRG as
major
shareholder)
acquire the
project for
further
exploration &
development
2016
CMM acquires
Greenmount,
completes
$1.5M capital
raising and
commences
Scoping Study
Source: Centrepeak Resources
Resources
The Karlawinda Project currently contains a JORC 2012 compliant Inferred resource of
650,800 ounces of gold (18Mt @ 1.1g/t Au) within the Bibra deposit that was drilled by
IGO from 2009-2012. The known resource sits entirely within a (3-stage) open pit shell
(see Figure 7) designed by Cube Consulting using a gold price of A$1600/oz.
FIGURE 6. BIBRA GOLD DEPOSIT – 2014 MINERAL RESOURCE ESTIMATES
Tonnes (M) g/t Au Oz
Laterite 2.1 1.2 82,900
Upper Saprolite 0.8 0.9 21,700
Lower Saprolite 2.3 1.2 88,900
Transitional 1.3 1.1 46,800
Sub-Total 6.5 1.1 240,300
Fresh 11.5 1.1 410,500
TOTAL INFERRED 18.0 1.1 650,800
Mineral Resource estimate by Independence Gold (IGO) used A$1600/oz gold price & 0.5g/t Au cut-off grade
Source: Capricorn Metals
Gordon Capital Pty Ltd Page 9 of 20
Experienced Project
Manager appointed to
oversee drilling &
Feasibility Study program
New drilling results from
shallow hanging-wall
mineralisation have the
potential to significantly
improve project
economics
Close to significant
infrastructure
CIP/CIL/Heap leach
treatment capability
The 240,000 ounces contained in oxide and transitional material should assist with
initial production ramp-up and with capex payback requirements. The thickness and
continuity of the main mineralised lode at Bibra, and its shallow 30o dip, make Bibra an
attractive mining proposition.
In 2013, IGO stated “Reverse Circulation (RC) and diamond drilling during the year
focused on infill and extensional drilling at the Bibra deposit. Diamond drill holes (tails)
were also used to provide geotechnical information and samples for metallurgical test
work as part of the Scoping Study”. IGO found results from infill drilling were in line
with previous results.
Capricorn Metals is currently drilling toward an upgrade to the gold resource and
completion of a Scoping Study on the commercial development potential of the project
by June-July 2016. It has appointed an experienced Project Manager, Neville Bergin, to
oversee the scoping and feasibility study program.
FIGURE 7. BIBRA GOLD DEPOSIT – SCHEMATIC CROSS SECTION (199950N)
Source: Capricorn Metals
Approximately A$12M has previously been spent on the project with good quality initial
technical studies conducted on the mineral resource (Optiro); mining concepts (Cube
Consulting); and metallurgy and process plant design (GR Engineering & Lakefield
Oretest): as well as geotechnical, hydrology, environmental and ethnography.
Logistics
Karlawinda is favourably positioned close to significant infrastructure: Major town,
airport, sealed roads, major highway, and fresh water. The Pilbara-Goldfields Gas
Pipeline is located 50km to the west of the main project area.
Mining studies highlight a large 3-stage open pit with maximum depth of 230m and a
life-of-mine strip ratio (waste-to-ore) of 4:1.
Gordon Capital Pty Ltd Page 10 of 20
On-site processing with
2-2.5Mtpa capacity
DIDO workforce cost
savings
New drilling has
identified high grade
intersections outside of
current resource
envelope and suggest
possible higher grade
mineralised core
Archean-age orogenic-
style gold deposits
Mineralisation is open in
all directions
Previous work by IGO found the metallurgy of Bibra was amenable to CIP/CIL and Heap
Leach treatment with the intention to build a processing plant on site with an annual
capacity of 2 to 2.5 Million tonnes a year for at least seven years, suggesting annual
production of around 80-100,000 ounces.
While there is currently no shortage of suitable secondhand process plants available in
Australia, Capricorn is likely to seek guidance and input from major shareholder Regis
Resources, who have successfully built and commissioned a number of high tonnage-
low grade processing plants as part of their Duketon Gold Project near Laverton.
Workforce Drive-In-Drive-Out of nearby Newman township may be the preferable
option over the expense of establishing a camp and support facilities on-site.
FIGURE 8. BIBRA GOLD DEPOSIT - SCHEMATIC CROSS SECTION (200000N)
Source: Capricorn Metals
Geology
Bibra and the associated deposit Francopan (which was the initial interest of IGO) are
Archaean-aged orogenic-style gold deposits. Both are hosted within a thick, flat-lying
gold mineralised greenstone belt which is amenable to low-cost open pit mining with
free-dig capability down to around 55m (37% of total known resource to date).
Gold mineralisation at Bibra has been identified near surface, in the weathered laterites
and oxide zones and at depth within the fresh sandstone. The deposit remains open in
easterly down-plunge positions and potential exists for strike extensions and as yet
unidentified stacked mineralised lodes at depth.
Gold is present in metamorphosed sandstones and is primarily associated with a
biotite-albite-pyrite-K+spar-calcite alteration assemblage known as the Biotite Zone.
Marginal to the Biotite Zone, chlorite-calcite-biotite assemblages with trace pyrite
grade into chlorite-biotite-garnet. The Biotite Zone is over 70m wide and is pervasive.
Gordon Capital Pty Ltd Page 11 of 20
Drilling at depth has
revealed potential for
high-grade core
mineralisation
Primary gold mineralisation in fresh rock is marked by 3-10% sulphides, magnetite
grains, quartz vein/veinlets and fine grained gold. Mineralisation in fresh rock
continues to near surface in the oxide zone and includes a laterally extensive supergene
horizon that is hosted within a laterite.
There are no historical gold workings in the area and this was considered a significant
greenfields discovery in a “new gold province” by IGO in 2009, who further described
Bibra as having a similar geological setting to its jointly-owned Tropicana Gold Project
north-east of Kalgoorlie.
Francopan
Francopan Gold Prospect is located approximately 5km south east of the Bibra Gold
Deposit. Mineralisation is covered by the younger, Proterozoic-aged sedimentary rocks
along the northern margin of the Bangemall Basin.
FIGURE 9. FRANCOPAN GOLD PROSPECT
Source: Capricorn Metals/ Independence Group
Limited drilling undertaken on the prospect by IGO showed beneath the cover
sequence there were broad zones of mineralisation containing narrower higher-grade
intervals. Some holes have intersected a second, deeper mineralised sequence,
including zones of 81m @ 1.2g/t Au (includes 15m @ 3g/t Au) and 37m @ 1.9g/t Au.
Further Investigative drilling at Francopan will be targeted to define the size and
possible connectivity with the mineralised system at Bibra and to identify high-grade
areas that can be assessed for underground mining opportunities.
Gordon Capital Pty Ltd Page 12 of 20
Number of untested
regional anomalies with
potential for hosting
+1Moz
Company seeking
expressions of interest to
sell Madagascar
commercial property
Regional Exploration
The Karlawinda Project remains largely unexplored with only limited reconnaissance
work (aircore drilling, surface geochemistry, some minor geophysics) having been
completed.
The Company has identified a number of untested anomalies, including K3, for follow-
up regional exploration drilling with the potential for a hosting more large-scale
(+1Moz) mineralised system within the project area.
FIGURE 10. REGIONAL EXPLORATION
Source: Capricorn Metals
GRAPHITE ASSETS & COMMERCIAL REAL ESTATE, MADAGASCAR
As Malagasy Minerals, the Company held interests in a number of low grade flake
graphite projects in Madagascar.
Through a subsidiary company, St Denis Holdings SARL, Capricorn Metals also owns a
block of real estate in the centre of Antananarivo, the capital of Madagascar covering
19,000m2 (5 acres) and previously occupied by BRGM, the French Geological Bureau.
The property has commercial zoning and includes the Company’s Madagascar offices,
as well as other offices and houses which currently provide nominal rental income. The
potential of the land lies in development for a range of residential, commercial or
industrial possibilities. The Company is seeking expressions of interest for the sale of
the land which has an estimated present value of around A$4.9M.
The Company’s Madagascan interests are to be divested with proceeds from the sale
likely to be directed toward further exploration, resource development and feasibility
study work at Karlawinda.
Bibra Deposit
K3 Prospect
Francopan
Gordon Capital Pty Ltd Page 13 of 20
On a 100% Inferred JORC
resource EV/Resource Oz
= $80
Project capex forecast =
A$100M
Each additional year of
production at Bibra adds
~A$20M to our valuation
Bibra valuation =
A$103M (NPV20)
VALUATION
CMM FPO + escrow
Price (11/04/16) A$ 0.14
171.6M shares held by
Greenmount & escrowed
until February 3 2017
SOI M 388.7
Market Cap A$M 54.4
Cash A$M 2.15
Enterprise Value A$M 52.25
EV/Resource Ounce A$/oz Au 80
FIGURE 11. PROJECT ASSUMPTIONS
AUDUSD (x) 0.7250
Current gold spot prices are
trading above 12-month
average
BHP has 2% net smelter
royalty
US$ Gold ($/oz) 1,200
A$ Gold ($/oz) 1,655
WA Royalty 2.5%
Third Party Royalty 2.0%
Initial WACC (Discount Rate) 20.0%
Source: Gordon Capital estimates
FIGURE 12. PROJECT SNAPSHOT
Karlawinda - Bibra
Location Pilbara, WA With a likely project capex
requirement - inclusive of
working capital, BFS &
contingencies - of around
A$100M we have assumed
a 65:35 (debt-to-equity)
funding model to develop
the Bibra Project.
Sensitivity
Every year of open pit mine
life beyond current
resource at comparable
head grade adds ~A$20M
to our valuation.
AISC
= C1 cash costs
+ Corporate
+ Sustaining capex
+ D&A
+ Royalties
Interest 100%
Mineral Resources (Inferred) 650koz
Strip ratio 4:1
Mine Type Open Pit
Plant Configuration Gravity/CIL
Capex (including BFS & contingencies) A$100M
Mill Throughput 2.0-2.5 Mtpa
Average Head Grade 1.1 g/t Au
Recovery 91-93%
Production 80-100koz/yr
Mine life (Minimum) 7 years
C1 Cash Costs (LOM) A$773/oz
All-In-Sustaining-Cost (LOM) A$858/oz
NPV20 (Net Present Value) A$103M
Source: Capricorn Metals, Gordon Capital Estimates
Gordon Capital Pty Ltd Page 14 of 20
As expected grade has
the most +ve impact on
valuation metrics with a
65% uplift in annual cash
flow at 1.5g/t average
head grade
FIGURE 13. PROJECT SENSITIVITIES (Single variable scenario)
Karlawinda - Bibra
BASE CASE
VARIABLE
Cash flow
impact
AUDUSD x 0.7250 Scenario 1 lower AUDUSD 0.6000 +38%
Gold Price US$ /oz 1,200 Scenario 2 higher US$ gold price 1,500 +45%
Throughput tonnes 2,500,000 Scenario 3 bigger throughput 3,000,000 +21%
Grade g/t Au 1.10 Scenario 4 higher average grade 1.50 +66%
Recovery % 93.0 Scenario 5 higher recovery 95.0 +4%
Production oz 82,225 NOTES
Base Case = Annual Basis at Nameplate Capacity
All non-variable inputs fixed to Base Case AISC A$/oz 854
Revenue A$M 136.1
Cashflow A$M 52.7
Source: Capricorn Metals, Gordon Capital Estimates
FIGURE 14. AUDUSD + A$ GOLD PRICE (Jan 2014 – Apr 2016)
Source: investing.com
Movements: Jan 2014 – Apr 2016 Averages: Apr 2015 – Apr 2016
AUDUSD US$/oz A$/oz AUDUSD US$/oz A$/oz
High 0.9504 1391.40 1755.38 1M 0.748 1244.62 1664.53
Low 0.6824 1046.20 1329.17 3M 0.722 1180.76 1635.59
Avg 0.8159 1209.53 1490.38 6M 0.721 1142.46 1585.13
12M 0.737 1150.96 1563.13
Source: investing.com
0.600
0.650
0.700
0.750
0.800
0.850
0.900
0.950
1.000
1000
1100
1200
1300
1400
1500
1600
1700
1800
AUDUSDA$/oz A$ Gold Price + AUDUSD
A$/oz
AUDUSD
Gordon Capital Pty Ltd Page 15 of 20
Near-term production
capability
Right location, resource,
team
OUTLOOK
Amid the currently bleak landscape for Australian resource companies, it is encouraging
that some greenshoots are finally emerging. Interest in the Australian gold sector is
also increasing despite price concerns in other commodities.
Investors seeking near-term production opportunities with plenty of resource
expansion potential and exploration upside should consider Capricorn Metals.
Since emerging out of the largely overlooked and ignored Malagasy Minerals in late
2015, Capricorn has set about finishing the job of developing a profitable mine at Bibra
that started with its discovery back in 2009. With the right location, right resource and
right team in place Karlawinda is going for gold.
Source: Capricorn Metals
Gordon Capital Pty Ltd Page 16 of 20
DIRECTORS & MANAGEMENT
Guy LeClezio BA
CHAIRMAN & NON-EXECUTIVE DIRECTOR
Mr LeClezio holds a Bachelor of Arts from the University of Western Australia. He has
20 years experience in the mining and exploration industry and was an Executive
Director of Eyres Reed Ltd and Canadian Imperial Bank of Commerce who were leading
Western Australian stockbrokers specialising in the mining industry.
Peter Thompson B.Sc, M.Sc, MAusIMM
MANAGING DIRECTOR
Mr Thompson trained as a geologist in Trinity College Dublin and Leicester University,
he came to Australia in 1988 and has had a continuous career in exploration and mining
for gold, nickel and copper.
Employed by WMC, Anaconda Nickel, Jubilee Mines, St Barbara Ltd, Beaconsfield Gold
and Central Asia Resources in a range of roles, and overseen several discoveries, project
developments, feasibility studies, acquisitions, divestments and company start-ups.
Recent responsibilities as CEO of Beaconsfield Resources and Central Asia Resources
have been for operating deep underground gold and heap leach start-up operations.
Currently a non-executive director of Central Asia Resources Ltd & Marmota Energy Ltd.
Peter Langworthy B.Sc Hons, MAusIMM
TECHNICAL DIRECTOR
Mr Langworthy is a geologist with a career spanning 26 years in mineral exploration and
project development in Australia and Indonesia. He has specific expertise in building
successful teams that have been responsible for significant mineral discoveries and in
integrating technically sound exploration and resource development strategies into
corporate planning.
His industry experience includes 12 years in senior management roles with WMC
Resources, four years with PacMIn Mining as Exploration Manager, five years with
Jubilee Mines where he built the team responsible for numerous discoveries at the
Cosmos Nickel Mine and the Sinclair nickel project, and three years with Talisman
Mining as Technical Director. At Jubilee he was part of the corporate team responsible
for the growth of the company until it was taken over by Xstrata for $23/share.
Mr Langworthy is a non-executive chairman of Syndicated Metals Limited (March 2012
to present).
Gordon Capital Pty Ltd Page 17 of 20
Heath Hellewell B.Sc Hons, MAIG
NON-EXECUTIVE DIRECTOR
Mr Hellewell is an exploration geologist with over 22 years of experience in gold, base
metals and diamond exploration predominantly in Australia and West Africa. Mr
Hellewell has previously held senior exploration positions with a number of successful
mining and exploration groups including DeBeers Australia Pty Ltd, Resolute Mining
Limited and Independence Group NL. Mr Hellewell ultimately rose to the position of
Exploration Manager at Independence Group.
Most recently he was the co-founding Executive Director of Doray Minerals Limited.
Following the discovery of the Andy Well gold deposits in 2010, Doray Minerals was
named “Gold Explorer of the Year” in 2011 by The Gold Mining Journal and in 2014
Heath was the co-winner of the prestigious AMEC “Prospector of the Year” award.
Mr Hellewell is currently an independent Non-Executive Director of Core Exploration
Ltd (ASX: CXO) and Duketon Mining Limited (ASX: DKM).
Neville Bergin
PROJECT STUDY MANAGER
Mr Bergin, runs his own mining consultancy, Neville Bergin & Associates, is a mining
engineer with extensive experience in feasibility studies, risk analysis, project approvals
and the operation of open pit and underground mines throughout Australia.
His experience and achievements include: Responsibility for the establishment and
construction of the Waihi Gold open pit, New Zealand; Rosebery Deeps Feasibility Study
and implementation; Resident Manager at the Fosterville Gold Mine, Victoria; Resident
manager then GM Operations at Jubilee Mines NL; Head of Operations, Australia for
Gold Fields (St Ives and Agnew Gold operations) and Feasibility Study Manager for
Minemakers Ltd’s Wonarah Phosphate Project, NT. Neville was previously non-
executive director of Northern Star Resources Ltd and BCD Resources Ltd.
FINANCIALS
NOTE: With Capricorn Metals recently acquiring the Karlawinda Gold Project and
transitioning its business towards gold, previous Company historical financial
information is not reflective of its current corporate position or future strategic plans.
This section will be updated as a more relevant account of the Company’s financials
becomes available.
Gordon Capital Pty Ltd Page 18 of 20
~56% free float
Greenmount shares held
in escrow to Feb 2017
CAPITAL STRUCTURE
As of 29 February 2016, Capricorn Metals Ltd
(ASX: CMM) had 388,727,498 fully paid shares
listed on the Australian Stock Exchange
including 171,636,476 escrowed shares (44.2%
interest) held by Greenmount Resources Pty
Ltd. Directors & Management control 13.7%
with existing Malagasy Minerals shareholders
controlling 44% of issued capital. Free float is 56%.
Twenty Largest Shareholders Number of
Ordinary Shares
Issued
Shares %
Centrepeak Resources Group Pty Ltd 74,221,378 19.09
Regis Resources Ltd 38,484,022 9.90
Nedlands Nominees Pty Ltd 28,536,277 7.34
Ellenbrook Investments Pty Ltd 17,671,673 4.55
Running Water Ltd & Associates 16,444,276 4.23
Resources Discovery Pty Ltd 16,135,322 4.15
Harmanis Holdings Pty Ltd 13,605,462 3.50
Bradley James Drabsch 12,684,910 3.26
Nefco Nominees Pty Ltd 8,578,435 2.21
Jules Leclezio 7,999,001 2.06
Peter Thompson 6,279,974 1.62
Quantum Holdings Pty Ltd 6,120,339 1.57
Magaurite Pty Ltd 5,570,000 1.43
Omni Geox Pty Ltd 5,104,903 1.31
HSBC Custody Nominees Aust Ltd 3,875,100 1.00
Richard M & K R Bennett 3,815,010 0.98
Rene Legoll 3,750,000 0.96
Z Wang Harvey & L Q Chen 3,149,622 0.81
JP Morgan Aust Ltd 3,032,124 0.78
Robert Hastings Smythe 2,900,000 0.75
TOTAL 277,957,828 71.50
Source: Capricorn Metals
SHARES
CMM ORDINARY SHARES 217,091,022
CMM ORDINARY SHARES (ESCROW TO 03/02/2017) – held by Greenmount 171,636,476
388,727,498
UNLISTED OPTIONS
CMMAK $0.15 OPTIONS (EXPIRY 30/11/2016) 7,500,000
7,500,000
Source: Capricorn Metals
Gordon Capital Pty Ltd Page 19 of 20
RECENT EVENTS
13 Apr 16 Karlawinda Drill Results
17 Mar 16 Notice of General Meeting/Proxy Form
14 Mar 16 Half Year Accounts
03 Mar 16 Capricorn Website Launch
01 Mar 16 Drilling commences at Karlawinda Gold Project
18 Feb 16 Appointment of Project Manager
12 Feb 16 Investor Presentation
10 Feb 16 Change of ASX Code to CMM
04 Feb 16 Karlawinda Fast Track Program
03 Feb 16 Director appointment and resignation
03 Feb 16 Graphite Trenching Results
29 Jan 16 Quarterly Activities and Cash flow Report
29 Jan 16 Transaction Update
08 Dec 15 Share Placement to Raise $1.5m
04 Dec 15 Acquisition Update
26 Nov 15 Presentation to Shareholders
06 Nov 15 Acquisition Update and Clarification
30 Oct 15 Quarterly Activities and Cash flow Report
26 Oct 15 Malagasy acquires Karlawinda Gold Project
30 Sep 15 Annual Report to shareholders
Gordon Capital Pty Ltd Page 20 of 20
GENERAL ADVICE WARNING: The information contained in this Report is only of a general nature and does not
constitute personal financial product advice. In preparing the advice no account was taken of the objectives,
financial situation or needs of any particular person. Therefore, before acting on the advice readers should
consider the appropriateness of the advice with regard to their particular objectives, financial situation and
needs. Readers should obtain and consider any relevant Product Disclosure Statements before making any
decisions about the subject matter of this Report and should seek independent professional advice.
DISCLAIMER: Although every attempt has been made to verify the accuracy of information contained in this
Report, Gordon Capital Pty Ltd (Gordon Capital) and InterPrac Financial Planning Pty Ltd (InterPrac) make no
warranties about the accuracy or completeness of any advice or information. The officers, agents, related
affiliates, related body corporate and employees of Gordon Capital and InterPrac accept no liability for any loss or
damage whatsoever arising from any investment decisions or use of the information or advice in this Report. All
information and advice contained in the Report are subject to change without notice.
All investment decisions are subject to risks. Past performance should not be taken as an indication of future
performance. Any ‘forward looking statements’ contained in this Report are based on current expectations about
future events. Words such as “anticipate”, “believe”, “expect”, “project”, “forecast”, “estimate”, “likely”,
“intend”, “should”, “could”, “may”, “target”, “plan” may identify forward looking statements. Such forward
looking statements are based on views held at the date of publication of this Report and are not guarantees as to
future events. Forward looking statements are subject to risks, uncertainties and other factors beyond the
control of Gordon or InterPrac. Therefore, actual results may differ from those referred to in such statements.
DISCLOSURE: This publication has been prepared by Gordon Capital Pty Ltd, as Authorised Representative of
InterPrac Financial Planning Pty Ltd, Australian Financial Services Licence No. 246638. The registered office of
InterPrac Financial Planning Pty Ltd is Level 3, 29-33 Palmerston Crs, South Melbourne, VIC 3205.
Please note that Gordon Capital has been retained by CAPRICORN METALS LTD to provide this report for a fixed
fee. Gordon Capital does not provide specific investment recommendations and does not receive any additional
benefit for the provision of this report. Gordon Capital aims to provide a balanced and objective analysis in this
report.
Stuart Glazebrook, the analyst responsible for this report, does not receive any indirect benefits or assistance
from Capricorn Metals Ltd. Our remuneration is not linked to the views expressed in this report.
Please see our Analyst Qualifications and Financial Services Guide, available at www.gordoncapital.com.au or by
calling +613 9607 1371 for further information.